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Terms in this set (19)Costs that vary in total in direct proportion to changes in an activity level are called: a) b) c) d) c) Which of the following is true about the changes in fixed costs? a) b) c) d) c) Which of the following statements is false? a) b) c) d) b)
Which of the following statement is true regarding fixed and variable costs? a) b) c) d) c) What is the contribution margin ratio of SuperGalaxy Enterprises with sales of $120,000, 65% of sales are variable costs, and operating income of $24,000? a) b) c) d) b) If sales are $410,000 and variable costs are $300,000 when 10,000 units are sold, what is the Unit Contribution Margin? a) b) c) d) a) Compute the break-even profit (in dollars) if fixed costs are $540,000 and variable cost are 70% of sales. a) b) c) d) b) If variable costs per unit decreased because of a decrease in utility rates, the break-even point would: a) b) c) d) a) If fixed costs are $550,000 and the unit contribution margin is $15, what amount of units must be sold in order to realize an operating income of $125,000? a) b) c) d) a) If fixed costs are $350,000, the unit selling price is $80, and the unit variable cost is $30, what is the break-even sales (in units)? a) b) c) d) b) The first step in the decision-making process is to: a) b) c) d) c) The amount of increase or decrease in cost that is expected from a particular course of action as compared to an alternative is termed: a) b) c) d) c) Relevant revenues and costs focus on: a) b) c) d) d) A business is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $15 per unit. The costs for the business to make the part (instead of purchasing) would be $12 of variable costs per unit and $8 of fixed costs per unit. If 30,000 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the differential cost increase or decrease from making the part rather than purchasing it? a) b) c) d) b) Which of the following is true? a) b) c) d) b) Which of the following costs is most likely to be the same between two alternatives? a) b) c) d) c)
A business received a special offer from an exporter to purchase 10,000 units of product at $13.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price: $21 Unit manufacturing costs: Variable: $12 Fixed: $5 Based on the above data, what is the amount of gain or loss from acceptance of the offer? $75,000 loss $40,000 gain $15,000 gain $85,000 gain $15,000 gain When a company is determining how much to charge as the normal selling price for a product, which of the following should not be considered: a) b) c) d) c) Below is cost information for Bythel Corporation's production and sale of 45,000 units of its sole product. Bythel desires a profit equal to a 10.8% rate of return on invested assets of $900,000. Fixed factory overhead cost $72,000 Fixed selling and administrative costs 45,000 Variable direct materials cost per unit 4.50 Variable direct labor cost per unit 7.65 Variable factory overhead cost per unit 2.25 Variable selling and administrative cost per unit 0.90 The dollar amount of desired profit from the production and sale of the company's product is: a) b) c) d) a)
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Which type of cost changes in total in direct proportion to changes in activity level multiple choice question differential variable fixed opportunity?This is the correct option. Variable cost staus the same per unit and therefore increases in direct proportion to changes in activity levels. (d) sunk costs. No, sunk costs are costs that have been incurred in the past.
Which cost changes in total in proportion to changes in volume?Variable costs typically change in proportion to changes in volume of activity. If volume of activity doubles, total variable costs also double, while the cost per unit remains the same.
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